Business Advisor - December 10, 2012 - Contents

Volume I Part 4 December 10, 2012 1 Business Advisor

Business

Advisor (Fortnightly inputs for professionals and executives)

Volume I Part 4 December 10, 2012


Contents

Entertainment and amusement services - T. N. Pandey

Duties of directors: Dos and don’ts - Dr S. Chandrasekaran

IFRS convergence - Vidhyadhar Kulkarni

Automatic stay of income-tax recovery - V. K. Subramani

Second-hand implements (cartoon) - Bimbadhar Mishra

Retail design and merchandising - Anand Chandrashekaran

Service Tax: Negative List, positive codes - Dr Sanjiv Agarwal

Corporate Social Responsibility (CSR): Business leaders’ views

Suresh Thimri, CEO, QNet India

SunGard

Vidya Shankar, Trustee, Shriram Foundation

Brotin Banerjee, MD and CEO, Tata Housing

Kazutada Kobayashi, President and CEO, Canon India

From press releases:

o CII

o Deloitte

o KLM

o ISQ

Case laws update - V. K. Subramani

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Disclaimer: "Management and editors do not necessarily agree with the

views of the authors in their articles and of the readers in their letters,

and of the query editors in their replies. The editors, authors and / or

publishers shall not be responsible for any kind of result generated out

of any action taken on the basis of suggestions, etc., made in any of the

write ups, interviews contained in any part of the magazine or for any

error, omission, commission to any person, whether subscriber or

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articles, queries and replies etc., rests with the publishers".

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Corporate Social Responsibility (CSR):

Business leaders’ views

QNet

Suresh Thimri, CEO

QNet’s CSR arm ‘RYTHM foundation’ sponsors school libraries

in Ladakh. QNet partners with Avalokitesvara Trust to

establish RYTHM Libraries for fifteen schools in remote areas

of Ladakh, in an effort to nurture and educate children in

isolated villages of Ladakh, including those on the Indo-

Pakistan and Indo-China borders.

Most schools in this region do not have adequate facilities for educational

support. Children in these schools have very limited access to reading

material and their lives are typically limited to the remote, mountainous

terrain where they live. With the establishment of the RYTHM libraries, QNet

and Avalokitesvara Trust aim to enhance the joy of learning and empower

these children with the gift of previously unavailable learning materials.

The project is installing libraries and spaces for effective learning to support

existing private, government, and monastic schools.

Some of the key initiatives under the project are

in the following areas:

• Sourcing and collection of children’s books for

libraries in schools.

• Designing, installing and furnishing reading

spaces in existing schools.

• Conducting learning modules, art and drama workshops in schools.

• Providing children with games, toys, sports equipment, art and stationery

supplies.

• Medical camps for vaccinations and treatment for respiratory and skin

infections.

• Sponsorship of individual children, including tuition fees, annual and

boarding expenses.


• Empowering Ladakhi teachers with educational resources, teaching aids

and training opportunities.

A key pillar of the RYTHM Foundation is education. There are a number of

initiatives all over the country to promote education and learning, but very

little reaches the remote areas of Ladakh. Avalokitesvara Trust has

undertaken an admirable but uphill task to help these young children,

many of whom travel several hours every day to reach their school, or stay

in monasteries and meet their families only once a year. We would like to

help ease that burden in some small way and support their thirst for

knowledge through the RYTHM libraries.

Quote of Abhigya Shukla, founder of

Avalokitesvara Trust: “The project hopes to see

children in the rural schools of Ladakh enhancing

their learning experience and imagination

through the activities and opportunities provided

by these libraries. They will gain more insight into

worlds beyond the standard curriculum in their schools and the isolated

surroundings in which they live. We have already started to reach out to

Changtang, an especially remote and deprived area of Ladakh, and hope to

extend our work to similarly needy parts of Zanskar and Kargil district in

coming years.”

About QNet (www.qnetindia.in)

QNet is one of the world’s fastest-growing online

shopping and business communities, with

upwards of five million customers and

independent distributors around the world. The

company offers an entrepreneurial network

marketing business opportunity and a portfolio of

lifestyle products that have been developed to

enhance the lives of its customers through innovation, wellness and luxury.

Established in Asia in 1998, QNet utilises the direct sales business model

on a proprietary e-commerce platform to market and distribute its exclusive

products. India is one of QNet’s fastest growing markets.

About Avalokitesvara Trust

‘Avalokitesvara Trust’ works on improving educational opportunities and

learning environments for children in rural schools in Ladakh. People

interested in donating children’s books, stationery, educational games and

http://www.qnetindia.in/


toys, sports equipment, and health supplies can write to

[email protected].

Donations for sponsoring a child or a school library are welcome. The team

is also on the lookout for volunteers with or without prior teaching

experience to work with the children. For details, visit

www.facebook.com/avalokitesvaratrust.

SunGard

SunGard has been named a 2012 Computerworld Honors Laureate for its

work in supporting microfinance. The Honors program, founded in 1988,

annually recognises organisations and individuals who have used

information technology to promote and advance public welfare, benefit

society and change the world for the better.

Quote of John Amato, Vice President/Publisher of Computerworld magazine:

“There’s no question technology plays a vital role in driving business

forward. It ensures an organisation’s ability to compete, innovate,

communicate and to thrive. What the Computerworld Honors Laureates so

clearly demonstrate is technology’s role in moving society forward.

Computerworld acknowledges and applauds the outstanding work being

done by individuals and organisations who have successfully used

mailto:[email protected]

http://www.facebook.com/avalokitesvaratrust


technology to improve the quality of our lives and that of future

generations.” Long-time SunGard client, Morgan Stanley, nominated

SunGard for the award in the category of Economic Development,

highlighting SunGard’s work with Mifos — the Grameen Foundation’s open

source technology platform for microfinance institutions (MFI). The

Grameen Foundation has a simple goal — to help poor people, especially

those living in hard to reach areas, have access to microfinance and

technology and as a result of this access, move themselves out of poverty.

SunGard has been directly involved in supporting MFIs in India and South-

East Asia by providing technology strategy assistance, product deployment

and customisation and supporting ongoing reporting needs. Notable work in

India has been done with Grameen Koota and Adhikar Microfinance who

together work with over half-a-million families. In addition, SunGard has

been working with organisations in the Philippines and Africa, benefitting

more than 200,000 families.

SunGard also provides technology strategy assistance to the growing

number of MFIs who have needs beyond Mifos implementation. These

interventions are mostly in the areas of building an IT investment and

architecture roadmap that is lean and efficient. Most of our work has been

in helping these institutions progressively integrate disparate data sources

for better reporting to funding agencies and regulators, greater transparency

to donors and better decision making ability for the institution.

Congratulations to everyone involved in helping SunGard earn this

prestigious honor, including core team members Seetha Rajagopalan and

Chetan Bekkinkeri as well as the following SunGard employees who

volunteered on their own time after hours and on weekends to contribute to

this worthwhile cause: Aravind Deivendran, Arvind Rao, Kavitha

Viswanathan from Asset Management; Aditya Yadav, Soundararajan Velu

and Phaneesh Nagaraja from Advanced Technology Services (in Global

Services and Distribution); Rajesh Kollam from Wealth Management; Satiya

Prasath; Chetan Garga and Akila Krishnakumar. Many thanks also to Mack

Gill, Michael Driscoll, Don Wood, and many others, for their active support

of SunGard’s efforts in this area.

The 2012 Laureates were selected by a panel of 22 distinguished judges —

many of them Computerworld Premier 100 IT Leader Honorees from diverse

industries — to evaluate the humanitarian benefits and measurable results

of applying technology to meet a specific social need.

Representatives from SunGard joined the other 2012 Laureates and

industry luminaries for a black tie Awards Ceremony and Dinner on


Monday, June 4 at the Andrew W. Mellon Auditorium in Washington, D. C.

All Laureate case studies are inducted into the program’s International

Archives and featured online at www.cwhonors.org.

This is the second time SunGard has been recognised as a Laureate by the

Computerworld Honors Program. In 2009, SunGard earned the award for its

innovative Infinity Software-as-a-Service Solution.

Your Acts of Kindness

The eagerness with which brand new school bags are opened to reveal a

fresh set of notebooks, and a gleaming new pencil box replete with colourful

pencils and crayons is an experience that all of us cherished when we were

young. Now, many underprivileged children will also be able to enjoy that

experience, and take their first steps into learning.

GSC employees in Pune and Bangalore participated in separate contribution

drives to raise money for school kits, books and other basic school needs for

underprivileged children in their communities.

In SunGard Pune, a ‘School Kit’ charity drive was held over May and June

to support the NGO Seva Sahayog, and saw many contribute whole-

heartedly towards buying school kits for underprivileged children. These

children come from families who struggle to meet their basic needs, and

education for them would have remained a distant dream, if it was not for

the efforts of organisations like Seva Sahayog that have taken up their

cause. Through their association with socially conscious corporates and

individuals, Seva Sahayog is helping children build a better future, and

SunGard has been proudly supporting their efforts for the past three years.

This time SunGard Pune employees contributed Rs 2,00,000 and with a

matching contribution from the company, a total amount of Rs 4,00,000

was handed over to Seva Sahayog. The money will go towards providing

school kits and other school needs and touching the lives of more than a

thousand children.

Quote of Shailesh Ghatpande, Director, Seva Sahayog Foundation: “To see

the children’s faces light up with excitement at the sight of their new school

kits is indescribable.”

In SunGard Bangalore, the ‘Back to School’ drive in support of the

organisation Vishwas raised Rs 81,000 from employees. The total amount of

Rs 1,62,000 including the matching company contribution was handed over

to Vishwas to help fund tuition fees, bags, books and other basic school

needs for the children of Vishwas. SunGard Bangalore employees have been

associated with various initiatives for Vishwas over the past few years.


SunGard Donates 60 Computers

SunGard has recently donated 60 desktop computers to NGOs Swadhar and

Chandraprabha Charitable Trust in Pune. The 50 computers donated to

Swadhar have been set up by the NGO at three schools that they support -

Raosaheb Patwardhan School, Erandawane Madhyamik High School and

VidyaVardhini High School. The 10 computers donated to Chandraprabha

Charitable Trust have been set up at Prabhakar Rege Ashramshala, their

own educational facility that helps students complete their school

curriculums before taking their exams at state-run schools.

These latest donations of computers are part of SunGard’s ongoing Digital

Equaliser Program aimed at bridging the digital divide for children and

students from less privileged sections of society.

Shriram Foundation

Vidya Shankar, Trustee

Shriram Foundation (www.shriramfoundation.org)

was started in 1993, inspired by JRD Tata ‘s

statement of purpose for corporates, as a small

project for destitute children. We moved into the

area of education as a mode of empowering

children and families especially in underserved communities.

Soon the team realised that social transformation

is tied to the school, its ethos and culture. It was

not enough to have a child-centred, caring

environment and a relevant pedagogy for children

in schools, but the responsibility was far beyond

that in rural villages.

Shriram Foundation anchored these findings into real-time channels and

strategies that provided for disseminating and receiving positive culture

from the very milieu the schools were located.

Our schools are aimed at being spaces of cultural

negotiation and amalgamation, and a collective

transformation of society. Our initiatives include

small and medium Shriram schools in rural

communities of Tamil Nadu and Andhra Pradesh,

which have vocational curriculum built in from a

very young age.

http://www.shriramfoundation.org/


Our expansion plans are partnership with schools

that are ready for enhanced learning processes

that we will install, anywhere in the country,

where local youth and energies are waiting for a

catalyst for start up of the social reform process,

very much embedded in education of the whole

community.

Giving vocational education its due place has happened with the increasing

and encouraging patronage for our Shriram Vocational and Community

college courses in our various premises.

Our successes are small, but we are confident of the track we have chosen.

Tata Housing

Brotin Banerjee, MD and CEO

Tata Housing lays a strong emphasis on the Corporate Social

Responsibility, by virtue of being part of group that believes

in giving back to society they serve. In keeping with the Tata

Group philosophy, we support and strengthen key

communities around our project sites by contributing

resources in the areas of infrastructure development, health,

education, etc. These include by organising health camps,

giving donations, forming trusts and giving a helping hand towards the

needy.

Towards this end we have earmarked 1% of our net profit at the corporate

level, Rs 4 per square feet and Rs 6 per square feet of built-up area of each

project in Smart Value homes and Tata Housing respectively. Our activities

include sustainable construction, welfare of construction of workers and

vocation skill training. Some the recent activities spearheaded by Tata

Housing include: Infrastructure development, computer education, labour

camps, neighbourhood ground water recharge activities etc.

At Tata Housing we see it as a core deliverable and form a mandate for all

our constructions. Be it value homes or high-end luxury villas, all projects

of Tata Housing are sustainable green developments certified by IGBC.

We have also launched a Green CSR initiative under the banner of BIG

(Beautiful is Green). BIG is promoted as a national campaign to drive

awareness on small changes leading to big difference, within the vision that

acts of small green initiatives will bring in a greener sustainable tomorrow.

Through this initiative we persuade people to share Green ideas, take the


green pledge and also motivate them to make a green switch and be

recognised as a green switcher by shifting from their normal non green

practices of daily lives to greener and sustainable alternatives

About Brotin Banerjee

In a career spanning 13 years across key Tata Group companies, Brotin

Banerjee has acquired an in-depth understanding of the Indian consumer.

Banerjee joined Tata Housing Development Company Ltd (a 100%

subsidiary of Tata Sons) in 2006 as Deputy Chief Executive Officer. In 2008

he was appointed as Managing Director and Chief Executive Officer of the

company, giving him the distinction of being one of the youngest MDs of the

Tata Group. Banerjee was the leading force behind the turnaround of a loss-

making company into a profitable organisation, with over 50 million sq ft

under various stages of development. During his tenure, Banerjee has

revolutionised the face of the real estate sector, by pioneering innovative

concept of low-cost housing under Shubh Griha brand. He is also the proud

recipient of the Pathfinders Award for the “Most Enterprising CEO” at the

Realty Plus Excellence Awards 2010 for his contribution in shaping Tata

Housing Development Co Ltd as one of the most innovative, customer

centric and successful companies in real estate today.

Apart from this, Tata Housing also pioneered Sustainable Integrated Green

Township Development, by virtue of which, it is the only player today with a

holistic approach to the real estate segment with a pan-India presence.

Today, the company is recognised for its landmark projects, ethical business

practices and a consumer centric approach. For innovative technology and

design, the company has also won many awards such as the Top 10

Developers of India by Construction World, Developer of the Year by

Construction Week, GIREM 2010 for Best Real Estate Developer, GIREM

2009 for Promising Future Company, Multiple awards at Asia Pacific

Property Awards 2009 and 2010 among others, both at a domestic and

International level.

For a period of two years (2004-2005), Banerjee was deputed to Barista

Coffee Company Ltd., in the role of Vice President – Marketing, Strategy and

Corporate Communications. His role was to ensure the revival of the brand

that was the pioneer in building the ‘out of house’ coffee culture in India. He

was subsequently promoted to the role of Chief Operating Officer. Not only

did he stabilise the company but during his time many innovations and new

products were launched (Barista Crème, Barista Radio, Barista Smart Card

etc.), which had helped Barista become an aspirational and premium brand.

Pitch magazine in its anniversary issue in October ‘04 featured him in the


list of top 50 marketing professionals in India. During his tenure, Banerjee

ensured that Barista became one of the country’s most successful, premium

and aspirational brands.

Banerjee was placed in Tata Chemicals as a Product Manager – Branded

Salt, where he was instrumental in the successful re-launch of Tata Salt

Brand with the most popular campaign (Tata Namak – Desh Ka Namak) as

well as in increasing its market share to its highest level till then. He had

the vision to cater to the bottom of the pyramid and in the year 2001. Tata

Chemicals launched a low-cost branded iodised salt ‘Samunder’ in order to

reach the bottom of the pyramid and successfully convert the un-branded

salt users to use Iodised Namak.

Armed with a MA (International studies) from the School of International

Studies, Jawaharlal Nehru University, New Delhi, Banerjee joined the

prestigious TAS (Tata Administrative Services) in 1998. He also holds a BA

Honours degree from St. Stephen’s College, University of Delhi. Banerjee

was elected as a Professional Member of The Royal Institution of Chartered

Surveyors in 2011. He is currently the Chairman of CREDAI’s Affordable

Housing Committee and is also an active member of CII and FICCI’s real

estate committees.

Canon India P Ltd

Kazutada Kobayashi, President and CEO

At Canon India we have always believed that good values and

good business go hand in hand. CSR is about growing our

business responsibly. As a responsible business, Canon India

takes pride in being socially inclined, and focuses on

sustained and effective CSR projects. The CSR policy aligns

with the corporate philosophy of ‘Kyosei’ which means living

and working together for common good.

We believe that organisations should focus not only on the economic well

being of the nation it operates in but also upon its social fabric. Keeping up

with its commitment of giving back to the community it operates in, Canon

has been actively involved in various projects to reach out to less fortunate

and contribute for their development. We recently announced the launch of

our new CSR initiative - ‘Adopt a Village’ and adopted Ferozepur Namak

village in Haryana. The programme aims to support the village with core

interventions in eye care, education and environment for a period of three

years.


As part of our 2012 initiatives, Canon India had earlier organised eye-

screening camps across 6 states of India. We also partnered with UNICEF

‘Awaaz Do’ campaign to promote the right to education in India. We have

successfully adopted two green belts to support plantation of trees and

organised blood donation camps in Bangalore and Hyderabad, where more

than 300 employees of Canon had donated blood.

Starting 2013, Canon India will be partnering with Rapid Metro Rail and will

be adopting six green belts for a greener environment. In addition, it also

aims at adopting more and more villages across India to touch the lives of

millions.

About Kazutada Kobayashi

Kazutada Kobayashi joined Canon in 1980 after his graduation from Keio

University’s Political Science Faculty in Tokyo. He has spent 25 of the past

32 years working in the company’s various overseas operations in Germany,

the Netherlands, and Hong Kong.

Kobayashi was appointed as President and CEO of Canon Hong Kong Co Ltd

in 2008 and was responsible for the company’s strategic management and

direction. Besides Hong Kong, Kobayashi was also responsible for Canon’s

business in the Philippines, Taiwan, Macau and Mongolia.

Now, Kobayashi is steering the helm at Canon India P Ltd w.e.f. January

2012 as President and CEO, overseeing the Chief Executive function of the

overall management of the company and leading the company to growth in

the Indian sub-continent.

Kobayashi is a keen sportsman who enjoys playing tennis, golf and fishing.

He also likes cooking very much and is a passionate traveller who has

visited more than 30 countries around the world.

1980 - Joined Canon Inc., after University Graduation

1981 - 1982 Appointed as trainee to Canon USA, Camera Sales Operations

1982 - 1983 Canon Inc., Video Product Marketing

1984 - 1991 Canon Europa NV in Amsterdam, Video Product Operations

1991 - 1992 Canon Euro-Photo GmbH in Dusseldorf, Germany, Assistant

Product Manager for Video and Camera Marketing

1993 - 1995 Canon Inc., Manager of Sales and Marketing for Solar-Cell

Product Operations in Ecology Laboratory at Kyoto


1995 - 1998 Canon Europa NV, Manager of Sales for Solar-Cell Product

Operations

1999 - 2000 Canon Europa NV, Marketing Manager for Inkjet Printer and

Scanner Department

2001 - 2004 Canon Europa NV, General Manager of Sales Division in Canon

Consumer Imaging Business Unit

2005 - 2008 Canon Inc., General Manager of Strategic Market Development

Division, Inkjet Product Operations

2008 - 2011 Canon Hong Kong Co. Ltd., President and CEO

2012 Canon India Pvt. Ltd., President and CEO

**

From press releases

CII

Chandrajit Banerjee, Director General CII, welcomed

Sachin Pilot’s assurance that the Ministry of Corporate

Affairs will consider and work with the Finance Ministry in

allowing the 2 per cent post tax CSR spend for offset under

the IT provisions so that this expense did not tantamount

to be another surcharge.

The Minister’s proactive measure on this front is very appreciable. While the

comply or explain provision is part of the Bill, the Minister’s initiative in

getting a tax set off on the CSR spends, will come as a positive measure in

boosting Industry’s sentiment on this subject.

Banerjee further mentioned that CII had all along maintained that

mandatory provisioning of CSR expenses could actually be

counterproductive. Indian Industry, according to various surveys, was

already engaged in productive CSR activities which were not in the nature of

merely writing cheques but have made true value additions to society.

CII is happy that the Minister intends giving a free hand to Industry in

working out and implementing their CSR initiatives and encouraging self-

reporting of CSR activities. CII also welcomes the Minister’s statement to

involve industry in framing the Rules related to CSR provisions under the

proposed Act, so that necessary flexibilities may be incorporated in its

implementation.


Deloitte

Deloitte’s impact in community development

• Over 17000 employees to take to the streets

• Working in over 432 projects

• 8,42,000 people impacted in 10 years

With a strong belief in inclusion and social

responsibility, over 17,000 Deloitte employees took

to the streets on November 23, 2012 spanning 9

cities, aimed at touching and contributing to lakhs

of people.

Working in over 432 projects, professionals at all

levels in Deloitte were involved in various aspects of education, health care,

sanitation, environment, sensitisation camps, refurbishing orphanages,

cleaning archaeological sites and monuments, besides many of the

programmes that they have associated themselves with. They provide skills-

based volunteering and a helping hand to hundreds of NGOs where they

share their knowledge and expertise.

Speaking on this occasion, Impact Day, Hari

Kumar, Principal, Deloitte LLP, USA said: “It is an

opportunity for Deloitte’s people to put their

passion, determination, and skills to use for the

benefit of their communities. In the first year of

this initiative in 2003, Deloitte started with 600

volunteers who reached out to and touched the lives of 5000 people. Ten

years later, Deloitte has over 17,000 professionals across nine cities

devoting time and energy to impact over 2,40,000 people. We have come a

long way and still have a long journey before us.”

Rani Desai, Chief People Officer, Deloitte in India, said, “We have always

encouraged our people to volunteer and be a part of such initiatives. The

best part about this day is the fact that it is completely planned and

executed by our professionals. It is their passion that results in impacting

more than 2,40,000 people in a single day.”

Over the last 10 years, around 40 percent of Deloitte’s overall community

involvement effort has been dedicated towards the betterment of education

in the country. Through Impact Day’s continuous education initiatives,

Deloitte professionals have helped underprivileged students learn vocational


skills that make them more employable and help in deciding the right career

path.

Deloitte has been featured in the Limca Book of Records since the 2007

edition for the maximum number of community hours delivered in a single

day.

A brief on the various Impact Day projects in India

Hyderabad

• 270 projects in Hyderabad

• 3 big threads with over 500

volunteers

• Focus areas: Infrastructure

developments in

underprivileged schools,

transformation of AIDS

patients building, developing a

unique herbal garden.

Mumbai

• 60 projects in Mumbai.

• Focus areas: Health camps and educational workshops for street children,

environmental awareness, health camps to check cancer patients in slums,

spending time with elderly in old-age homes, refurbishing of old school

rooms, book donation.

Delhi

• 42 projects in Delhi

• Focus areas: Sensitisation camps on eye donation,

promotion of sustainable development in society, spending

time with underprivileged children by engaging them in

games and educational workshops, camp for animal

lovers.

Bangalore

• 45 projects in Bangalore

• Focus areas: Public awareness on health issues, cleaning up a lake,

cleaning up a public park, improvement of underprivileged school facilities.


Pune

• 2 projects in Pune

• Focus areas: Setting up solar lights for tribal children while studying,

create a story wall for blind students.

Kolkata

• 2 projects in Kolkata

• Focus areas: Games and activities for physically challenged children,

education camps for children in slum areas.

Ahmedabad

• 5 projects in Ahmedabad

• Focus areas: Awareness programmes on evils of tobacco, alcohol

addiction, spending day with children afflicted with leprosy, environmental

protection.

Chennai

• 6 projects in Chennai

• Focus areas: Sensitisation programme on mental disabilities in

educational institution, spending a day with children in an orphanage,

spending a day with cancer patients.

KLM

For the third year in a row, KLM organised the “From

Holland” food and wine festival on board all KLM flights

from Amsterdam in the month of October and November.

During the festival, we introduce our passengers to

typically Dutch produce, meals and traditions. The theme

in Business Class is “from Dutch sea and soil” treating

our guests to Dutch produce. “The festival and theme

‘from our own soil and sea’ fits in well with KLM’s approach to Corporate

Social Responsibility.

The produce is really Dutch and really fresh. With this festival, KLM draws

attention to the distinctive character of the Netherlands and gives

passengers the opportunity to experience as much of ‘Holland’ as possible

during their journey,” explains Erik Varwijk, Managing Director KLM.


This year the festival focused extra

attention on local Dutch produce and

farming. The meals KLM served on

intercontinental flights in World

Business Class (WBC) during the

festival are made from ingredients

produced by Dutch farms, fisheries

and suppliers: William of Orange

potatoes from Flevopolder, Reypenaer

cheese from Woerden, and pike-perch with the Zuiderzeezilver label, which

are caught in the lakes of Holland. As a snack, passengers get to enjoy a

classic Dutch favourite: a croquette in a roll. In Economy Class passengers

were able to savour typically Dutch snacks and meals. Regional favourites

such as “stroopwafel” syrup biscuits and bread rolls filled with Beemster

cheese, or red cabbage with minced-beef meatballs followed by traditional

cream-filled, chocolate-coated “Bossche” balls were all on the menu. Besides

these special treats, passengers were also able to enjoy Dutch films, music

and programmes using the Inflight Entertainment System. (www.klm.com)

About Air France - KLM

Air France KLM, the result of a merger between Air France and KLM in

2004, is one of the leading European air transport groups. Its main

activities are the air transport of passengers and cargo as well as aircraft

maintenance. In 2011, Air France KLM carried 75.8 million passengers and

1.1 million tonnes of cargo. The group’s fleet comprises more 586 aircraft,

including 173 regional aircraft operated by its partners Brit Air, City Jet,

Regional and KLM Cityhopper. Its network covers 230 destinations in 113

countries from its hubs at Paris-Charles de Gaulle and Amsterdam-

Schiphol. The Flying Blue frequent flyer programme is leader in Europe and

has over 21 million members.

With their partners Delta and Alitalia, Air France and KLM operate the

biggest transatlantic joint venture with more than 250 daily flights.

Air France and KLM are members of the SkyTeam alliance which has 18

member airlines, offering customers access to a global network of nearly

15,000 daily flights to 993 destinations in 186 countries.

Indian Society for Quality (ISQ)

Indian Society for Quality (ISQ) awarded L. Lakhsman, Executive Chairman,

Rane Group with Jamshetji Tata Award for his outstanding contribution to

the Indian society through his exceptional leadership and his holistic focus


on quality. The award was presented by Dr V. Krishnamurthy, Chairman,

National Manufacturing Competitiveness Council at a gala function held in

Delhi.

Jamsetji Tata Award is given to industry leaders who have made a

significant contribution to the Indian society through their work of leading

an organisation with exceptional and holistic focus on quality. They are

persons with humility, constancy of purpose and determination. The Award

is given to those who have demonstrated outstanding results and are role

models.

Accepting the award L. Lakshman said, “To be nominated

for an award named after the greatest of industrial

builders of India and the visionary who established the

Indian Institute of Science is a great honour indeed. That

it relates to quality management, a discipline close to my

heart makes it even more special. Over the years, Rane

has won a few awards relative to quality management. But

this I consider very special and will cherish.”

L. Lakshman (LL) steered the Rane Group during a very

challenging and exciting phase in the automobile industry’s evolution and

transformation in India. Under his leadership, Rane Brake Lining Limited,

Rane Engine Valve Limited, Rane TRW Steering Systems Limited and Rane

(Madras) Ltd won the coveted Deming Prize. In 2011, Rane TRW Steering

Systems Limited (SGD) won the prestigious Japan Quality Medal, the

highest milestone of TQM. In 2012, Rane (Madras) Limited also won the

Deming Grand Prize (formerly Japan Quality Medal).

Rane Holdings Limited is the apex company of the Rs 26.5 billion (US$ 500

million) Rane Group, an acknowledged leader in the auto component

industry. Rane Group works with a number of overseas companies, TRW

Inc. USA and NSK from Japan being the major partners.

LL is a Mechanical Engineer from the PSG College of Technology, University

of Madras and an alumnus of London Business School, UK. Joining one of

the group companies as a Management Trainee in 1970, he worked his way

up to become the Chairman of the group in 1992.

Even as a high school student, at vacation times LL used to go around the

Rane factories. It stood him in good stead when LL started working for Rane.

Right from day one he had the reputation of a person who will not hesitate

to work hands on.


On joining Rane Brake Lining Limited, LL went to work with the collaborator

DON International in Manchester, UK. This was a tremendous exposure.

Not only a new cultural experience, but also an exposure to the scientific

step-by-step approach to problem-solving and management.

Besides, whatever he learnt from his father and uncle, there were two

mentors. The first was F. P. Parkes, the Managing Director of DON

International in Manchester, UK. The other gentleman was R. V. L.

Thathachari, a member of Rane board. A lawyer by background, he had

incisive knowledge of laws and statutes and had uncanny ability to get to

the heart of issues.

In addition to being a Director in Rane group of Companies, LL serves as an

Independent Director in public limited companies such as Automotive

Stampings and Assemblies Limited, DCM Engineering Limited, Force Motors

Limited, SRF Limited and Tata Auto Comp Systems Limited.

LL has been spearheading the CSR initiatives of Rane Group and is the

Managing trustee of Rane Foundation (RF), a public charitable trust

founded by Rane Companies. Under the aegis of RF, Rane Polytechnic

Technical Campus (RPTC) has been established in Tiruchirapalli District in

2011 to augment human capital formation in vocational skills. He chairs the

RPTC Governing Council.

LL is also a member of the Governing Council of The Banyan, Chennai, a

long-standing NGO engaged in rehabilitating destitute women.

LL’s passion has been People and Processes. He firmly believes that a well

developed human resource talent base coupled with robust processes form

the foundation for an organisation’s long term sustainability and growth. He

continues to mentor the HR, TQM and IT leaders in the group.

Apart from being a former president of ASSOCHAM, ACMA and Madras

Chamber of Commerce, LL has also been an active member in various

industry forums.

LL is a keen sportsman. His interests are Tennis, Cricket and Swimming. A

voracious reader, books and journals on philosophy, management and

physics are of specific interest to him. He is also an ardent lover of Indian

classical music.

(Inviting inputs from business leaders/CEOs on how they are fulfilling CSR in

their enterprises. More particularly the projects/ initiatives falling under CSR

in the current year, with details about the money set apart for the purpose.

Also, the plans for the coming year. Mail to [email protected]).

mailto:[email protected]


Case laws update

V. K. Subramani

Expenditure on a project abandoned not eligible for depreciation

Superfil Products Ltd v. Asst. CIT (2012) 20 ITR (Trib) 171 (Chennai):

Expenditure incurred towards expansion of project was held as capital

expenditure and when the project was abandoned, still it cannot be allowed

as revenue expenditure. Similarly, machinery procured for the abandoned

new project when not put to use is not eligible for depreciation.

Duty drawback equal to duty paid is includible as income derived from

industrial undertaking

Suzlon Energy Ltd v. Dy. CIT (2012) 20 ITR (Trib) 391 (Ahd): Refund of duty

drawback is of two types. One, being the drawback equal to the amount

originally paid on raw material or on import. Such drawback, when

refunded, would form part of the income derived from the industrial

undertaking. Where the drawback is based on All Industry Rates (AIR) and

the refund could not be linked to the exact amounts paid but is a fraction or

a proportion of the duty paid earlier, then such refund cannot be said to be

derived from eligible industrial undertaking.

Date of uploading return reckoned for issue of notice u/s 143(2)

E.K.K And Co v. Asst. CIT (2012) 20 ITR (Trib) 325 (Cochin): When the return

is uploaded electronically and the form ITR-V was received later by the

Centralised Processing Centre (CPC), the return filing date must be with

reference to date of uploading return. Receipt of ITR-V by CPC is not to be

considered for reckoning time limit for issue of notice under section 143(2).

Deduction under section 80-IA without reducing losses of eligible units

Jindal Aluminium Ltd v. Asst. CIT (2012) 54 SOT 283 (Bang): Where the

assessee is engaged in more than one eligible business in terms of section

80-IA, loss from one unit would not go to reduce the benefit of deduction of

the entire profits of any other unit or units. In other words, where a unit

makes profit and is eligible for the deduction, such deduction is not to be

reduced by the loss suffered in any other eligible unit.

Technical repair is different from technical service

Addtl. DIT (Intl. Taxation) v. BHEL-GE-Gas Turbine Servicing (P) Ltd (2012) 77

DTR (Hyd) (Trib) 29: Where gas turbines were sent abroad for repairs and the


amounts were paid towards repair charges to the party outside India, there

will not be any income which is deemed to accrue or arise in India. The

tribunal held that ‘technical repairs’ could not be equated to ‘technical

services’. Payment made to non-residents towards such repairs is not liable

for tax deduction under section 195.

Exchange fluctuation form part of export turnover

Mainetti India (P) Ltd v. Asst. CIT (2012) 77 DTR (Chennai) (Trib) 60: While

computing deduction under section 10AA any exchange gain or loss from

export realisation must be considered as forming part of export turnover. In

CIT v. Amba Impex (2006) 282 ITR 144 (Guj), it was held that foreign

exchange fluctuations are to be treated as part of sale proceeds and hence

liable to be adjusted in the export turnover for the purpose of computing

deduction under section 10AA.

It is change of opinion if AO had applied his mind during assessment

but reopens the case on the basis of audit objection.

GMR Holdings (P) Ltd v. Dy. CIT(2012)75 DTR (Bang) (Trib) 439: Where the

AO had considered the materials furnished by the assessee and completed

the assessment, later based on audit objection, if the assessment is sought

to be reopened it is tantamount to change of opinion on same facts and

material – which is not permissible in law.

(The author is a Chartered Accountant, Erode)

http://www.youtube.com/playlist?list=PLiL-R9_dblLXZh5otoiKiAEFMYQChTMDr


List of contributors to this issue

T. N. Pandey, Former Chairman, Central Board of Direct

Taxes

Dr S. Chandrasekaran, Senior Partner, Chandrasekaran

Associates, Delhi

Vidhyadhar Kulkarni, Chartered Accountant, Mumbai

V. K. Subramani, Chartered Accountant, Erode

Bimbadhar Mishra, Senior Manager at Andhra Bank,

Hyderabad

Anand Chandrashekaran, Executive Director, The

Gormei Market, Chennai

Dr Sanjiv Agarwal, Partner, Agarwal Sanjiv & Company,

Jaipur

Suresh Thimri, CEO, QNet India

SunGard

Vidya Shankar, Trustee, Shriram Foundation

Brotin Banerjee, MD and CEO, Tata Housing

Kazutada Kobayashi, President and CEO, Canon India

CII, Deloitte, KLM, ISQ


Published by: Shrinikethan, Chennai http://bit.ly/ShriMap

Edited by: D. Murali http://bit.ly/dMurali http://bit.ly/TopTalk

December 10, 2012

Business Advisor

On finance,

accounting, controls,

risk management,

taxation, and more…

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Documents

Business Advisor - December 10, 2012 - Contents